Jane Street Loses $15 Billion in July on AI Hedge Fund Situational Awareness and Tech Sell-Off

Wall Street trading giant Jane Street suffered losses of approximately $15 billion in July 2026, driven by its investment in AI-themed hedge fund Situational Awareness and other technology stocks. People familiar with the matter said a market sell-off during the month led to a sharp decline in the value of related assets. Situational Awareness, managed by former OpenAI researcher Leopold Aschenbrenner, sold most of its stock portfolio to Citadel, the firm run by billionaire Ken Griffin, after an AI-driven sell-off triggered margin calls.

Despite the losses, Jane Street has generated more than $40 billion in trading revenue so far this year, far exceeding large banks and other market-making rivals. In an internal memo to employees, the firm's senior management acknowledged that July was a "tough month" and attributed the poor performance to the withdrawal from Situational Awareness. The memo noted that the investment in Situational Awareness had performed well in the first half of the year, but a sharp reversal in July left the investment broadly flat for the year, still remaining profitable overall.

Jane Street also suffered losses on long positions in non-AI Asian equities, which had outperformed the market earlier this year. The firm said AI-related stocks fell sharply in July, with several large memory chip and semiconductor stocks declining by about 50%. In the memo, the firm said it would manage risk "more selectively", closed a significant portion of risk exposure in the areas where losses occurred in July, and reduced risk-taking in other strategies.